Correct me on this because I may misunderstand this process and in no way represent myself to be in expert in loans.
It is my understanding that as a broker your fee goes into escrow and is paid out of escrow. If you chose to do so for whatever reason couldn’t you take say $3000 out of your fee that might be $8000 and put that towards covering costs to the borrower in the escrow? This would reduce your commission but would be a tool that could be used in making the borrowers loan a true no cost loan. A broker might make that decision for reasons, but mostly to do more volume and make a no cost loan truly that so that if the borrower shops rates they do not find lower ones that what the no cost they offer is? This would only be feasible in larger principal amounts but I do not see why this could not be done.
Maybe there are legalities as to why this cannot happen but I do not know of any? Please explain why this could not be done, it would make no cost loans not higher rates and would make them truly what they are represented to be. The drawback is that it reduces the amount of money the mortgage broker makes, but it might increase volume.
Thanks in advance, I am not in the mkt for a loan at the moment but might be in a year or so and would like to understand this fully.
